The Organic Cotton Integrity Crisis

In an era where sustainability and ethical practices are at the forefront of consumer consciousness, the organic cotton industry emerged as the North Star amongst the fashion industry’s systemic firmament. With its exemplary, environmentally friendly cultivation methods and fair trade practices, organic cotton gained significant popularity worldwide. Yet, beneath this seemingly pristine façade, a mounting concern arises: the alarming disparity between estimated harvest figures, actual production and the quantity of organic cotton sold.

The Organic Cotton Promise

Organic cotton has witnessed an explosive demand, with a remarkable global growth rate of 37% in the past year. This surge reflects a notable shift in consumer demand for organic textiles. Its cultivation occurs without synthetic pesticides, herbicides, or genetically modified organisms (GMOs). Organic cotton farming drastically reduces the environmental impact by prioritising long-term resilience over short-term yields.

Furthermore, besides meeting the rising demand for eco-friendly textiles, organic cotton protects farmers’ health and promotes sustainable livelihoods in cotton-growing regions, particularly in developing countries. The Business Research Company predicts a growth rate of 8.0% through 2027. The industry must prioritise transparency and accountability as consumer expectations align with these principles.

Nevertheless, the global and centralised systems designed to ensure legality and authenticity in cotton-growing regions are increasingly subject to scrutiny. This requires critically examining the existing infrastructure and the need for transformative measures to establish a more robust and trustworthy framework.

The Supply and Demand Paradox

Amidst the organic cotton market boom, concerns have emerged regarding the authenticity of the organic claims made by suppliers and manufacturers. Shockingly, recent investigations and studies have suggested that the quantity of organic cotton sold globally far exceeds the actual production figures.

“We have been told by more than one sourcing professional that globally, considerably more cotton is sold as organic than is produced.” (Source: The Great Green Washing Machine Report Part 1).

An insufficient seed supply starkly contrasts the exponential growth organic cotton harvesting has supposedly experienced in recent years. It wasn’t until 2022 that a significant milestone was finally achieved, as two new organic variants successfully entered the GMO market-dominated countries of India and Pakistan. This accomplishment came after the completion of a ten-year decentralised breeding programme. Yet, a resulting harvest increase through greater seed availability will only be visible in the future.

“In recent decades, it has become increasingly difficult for farmers to obtain good quality organic cotton seed. On the one hand, large companies’ genetically modified (GMO) seeds dominate the market and threaten the purity of other varieties. On the other hand, traditional, non-GMO seeds have not been sufficiently developed and often do not meet farmers’ expectations regarding yield and processors regarding fibre quality.” (Source: FiBL – Research Institute of Organic Agriculture)

The India Case

As the largest single producer of the world’s organic cotton supply, India’s low data confidence level, as reported by the Textile Exchange, raises significant concerns. It is worth noting that the Textile Exchange is currently the only organisation providing insights into the global organic cotton supply. However, their India-specific data is solely derived from India’s Agricultural and Processed Food Products Export Development Authority (APEDA). The alarming aspect is that APEDA combines organic and in-conversion production into a single figure, and their oversight ends at the cotton gin. These factors compound the challenges in obtaining accurate and comprehensive data regarding India’s organic cotton production.

In the Textile Exchange’s latest report on the global organic cotton market from 2022, India showcased its global leadership in organic cotton production, making a remarkable contribution of approximately 38.2%.

Moreover, an estimated 2.1% of India’s cotton production is considered organic. Notably, even amidst the challenges posed by the pandemic, organic cotton production in India experienced a significant growth of 48%, as reported by Textile Exchange. These figures claiming immense growth of organic cotton output from India since 2017 do not correlate with the numerous reports detailing the evident lack of and accessibility to organic cotton seeds.

If Textile Exchange, the leading global advocate on organic cotton, can only issue low-confidence estimates and questionable data, and seed supply does not reflect organic cotton output, the inherent contradiction in supply and demand begins to unravel. This poses a significant dilemma for the industry and consumer trust. 

Amidst mounting apprehension, on March 3^rd of this year, IOAS, an independent third-party Accreditation Body, decided to suspend Control Union (India) from the Global Organic Textile Standard (GOTS) certification. This action resulted from their failure to meet the relevant requirements of GOTS and their inadequate handling of non-conformities brought to light through complaints. Does this case prove that GOTS’s supposed strict system of checks and balances works efficiently?

A System Designed To Fail

What becomes clear is it is a systemic problem, not country-specific. India only serves as an exemplary target.

There have even been claims of an Indian ​“cotton mafia”. GOTS’ representative Ganesh Kasekar summarised the various issues India is struggling with during a 2021 interview: ​“The Indian textile industry is highly fragmented and is largely dominated by the unorganised sector along with small- and medium-sized players. There are multiple bottlenecks from points like taxation policies, a high attrition level in the garment industry, and limited access to the latest technologies, and it also has significant issues of social and environmental parameters. Apart from that, there are other issues like the cost, availability and shortage of raw materials, environmental issues, infrastructure bottlenecks, and shortage of labour – which is sometimes seasonal.”

The current system, characterised by few inspections, fragmented interlocking systems, and an underinvested supply chain base, seems destined for failure. It is absurd that farming programmes, like CottonConnect’s REEL and other BCI programmes, require predominantly illiterate farmers to document their progress in field books. Unsurprisingly, audits have found that these books remain empty, making any form of KPI reporting unreliable and irrelevant.

Indeed, conventional quantitative assessment approaches are only suitable when considering the location and cultural context. Relying solely on such metrics might overlook crucial nuances and intricacies unique to each region and community. The industry must adopt a more holistic worldview encompassing diverse perspectives and incorporating a broader range of quantitative and qualitative factors. It would enable us to move beyond the limitations of conventional thinking and establish a more comprehensive framework that nurtures the environment, society, and economy symbiotically.

The organic cotton industry’s complexity and challenging coordination pose significant risks, highlighting the urgent need for an extensive overhaul.

This significant discrepancy raises questions about GOTS and BCI’s dominance, supply chains’ integrity, and adherence to fair trade practices. The organic cotton industry is at a breaking point.

When asked about the impact of market fragmentation on the GOTS label and how GOTS is ensuring traceability from field to final product, Rebecca Gollin, GOTS Public Relations Specialist, highlighted GOTS’ approach to addressing challenges through various initiatives. These initiatives include GMO testing, in-person audits, and volume reconciliation checks at every production stage. GOTS also mandates that related documents include the origin of raw materials and has implemented a mandatory Farm-to-Gin Registry, which restricts the distance raw cotton can travel from farm to gin.

To enhance traceability further, GOTS is developing the Global Trace Base, a centralised database that tracks the origin of organic cotton throughout the entire GOTS chain of custody. Gollin emphasises that cooperation among industry players, regulators, and certification bodies is vital for establishing a transparent and thriving organic cotton industry. By working together, they can create a more transparent, sustainable, and trustworthy marketplace for organic textiles.

However, the Eco-Age’s Great Green Washing Machine Report raises concerns about the effectiveness of the various initiatives mentioned. The report states, ​“If the cotton gins are not accurately collecting/​recording where the cotton came from, let alone verifying if the farmer concerned was indeed farming organically, this leaves a major loophole in the GOTS and OCS certifications.”

In light of this, it becomes evident that reliable and transparent documentation is crucial for the integrity of GOTS and the organic cotton industry as a whole. So, how will we get there?

Global Frameworks vs Place-Based Approaches

The industry faces rampant fraudulent practices fuelled by various contributing factors. The complex and intricate nature of global supply chains provides ample opportunities for misrepresentation and counterfeiting.

Tracing and verifying the authenticity of organic claims in the supply chain presents formidable challenges, with multiple intermediaries and production stages involved. 

Unreliable Data: Numbers Aren’t Neutral

GOTS, the independent non-profit, funded by an annual fee of € 150 and an initial certification fee ranging between 1.200 and 3.000 €, regardless of company size, has revoked contracts in response to fraud claims. The non-profit has built, what it calls, a rigorous system of checks and balances throughout fibre production. Yet, organic cotton begins with the seed, and although GOTS has implemented structures that claim to ensure confident certification, discrepancies prevail. Local cotton gins in India were discovered to unreliably document their cotton source, making their purchasing decisions purely based on fibre quality. 

Establishing robust fibre traceability systems is essential for transparency and accountability within the organic cotton supply chain. ​“Fibre tracers are effective for one garment loop, but incorporating recycled cotton without compromising organic purity remains a challenge,” says COSH! founder Niki de Schryver.

Alarmingly, institutional information is less reliable than expected. ​“Using self-reported information from brands, suppliers and farm organisations, the discrepancy between certified volumes purchased versus those reported by Textile Exchange was alarming,” says Crispin Argento. This demonstrates a fundamental lack of accurate reporting and data throughout the industry.

Yet, facts and figures are the nuts and bolts of the industry’s current model, defining the foundation of reliable certifications and, in turn, a credible industry. When facts and figures become subject to interpretation, the very foundation on which they rest starts to reveal its weaknesses. The objectivity and reliability of facts and figures begin to erode when different interests and biases come into play. 

For example, C&A and Shell Oil formed CottonConnect, which is perceived as a global not-for-profit but is registered as a UK Private Limited Company. CottonConnect files as a Small Company, and ownership was ceded to TextileExchange and the C&A Foundation – now the Laudes Foundation – on December 15, 2016. (Source: The Great Green Washing Machine Report Part 1)

Millions have been ​“invested” in initiatives, projects and subsidiaries that have supposedly yielded staggeringly positive results but with no reliable data as evidence. ​“Various NGOs are working, slogging to increase the farmer income by at least 10%, but here CottonConnect gives cooked-up data of a 200% increase in income with an understanding with Primark. Nobody questions this?” (Source: The Great Green Washing Machine)

How trustworthy is a system that is unveiled as a corporatocracy? Unscrupulous actors exploit loopholes in regulations and certification processes to gain financial advantage, ultimately compromising the reputation of genuine organic cotton producers.

A Paper Trail Leading Nowhere

A New York Times article by Alden Wicker, Emily Schmall, Suhasini Raj and Elizabeth Paton sent shockwaves, showcasing how deeply fraud is embedded. Crispin Argento, managing director of the sourcing firm The Sourcery and previous Executive Director of the Organic Cotton Accelerator, stated, ​“One-half and four-fifths of what is being sold as organic cotton from India is not genuine. Moreover, almost the entire supply chain is implicated in what he calls a game of ​‘smoke and mirrors’.”

Furthermore, the absence of global frameworks accommodating place-based approaches exacerbates the situation. Those doing the groundwork are missing from the big picture. This limits the industry’s ability to address these challenges locally and ensure integrity throughout the organic cotton supply chain. 

To summarise the issue: the organic cotton industry has been built by and for corporations, and it is in their interest that the system works to maximise profit whilst minimising input.

This reality is disastrous for farmers and businesses labouring to provide transparent, organic cotton, as experienced by Chetna, an ​“Organic and Fairtrade Cotton Supply Chain Intervention Project”. Although the introduction of various improvements in the lives of cotton farmers was notable, they encountered several obstacles along the way. Challenges included the growing prevalence of GM contamination and the limited accessibility of non-Bt seeds.

Additionally, the market exhibited reluctance to pay a premium price for organic cotton, primarily due to the prevailing confusion between authentic organic cotton and counterfeit alternatives. (Source: Case: ​‘Chetna Organic’: A Fair Trade Initiative Through Organic Cotton, Reference no. 815−023−1)

With vast sums of money at stake and a globalised system ripe for reform, radical transparency ironically poses a significant risk to the fragile certification infrastructure, which could crumble like a deck of cards. The industry’s current foundation of trust and authenticity relies heavily on a standardised system struggling with regionally-specific factors, paper-based documentation, and pre-organised audits, but these ineffective methods are gradually unravelling.

It is increasingly clear that the system needs a radical overhaul. According to industry leader Textile Exchange, verifying global organic cotton production requires recertification of all farms to meet their organic farming standard. (Source: EcoTextile) This raises the fundamental question of whether we are engaging in the proper conversation. Is a centralised platform with additional certifications the ideal solution?

Implications for Sustainability and Ethics

The implications of fraud in the organic cotton industry reach beyond mere financial losses, encompassing significant environmental and social consequences. Falsely labelled products threaten environmental sustainability by misleading conscious consumers seeking certified choices. This deception erodes trust and hinders genuine efforts toward a more sustainable future.

When consumers unknowingly purchase falsely claimed organic products, it undermines their commitment to supporting sustainable practices and diminishes their trust in the industry.

Moreover, these unethical practices adversely impact the livelihoods of legitimate organic cotton farmers. The ripple effects of fraud extend far and wide, emphasising the urgent need for transparency, accountability, and ethical practices throughout the organic cotton industry.

According to Cotton Diaries, organic premiums brands pay to their point of contact have become highly profitable for those furthest away from the farm. ​“Both Textile Exchange and BCI declare that organic cotton and BCI cotton are more ​‘sustainable’ without ever having provided any robust, independent studies showing that joining the organic or BCI system actually generated higher incomes for the farmers concerned, and so met the fundamental requirement underpinning the SDGs – that of giving overriding priority to meeting the essential needs of the world’s poor.” (Source: The Great Green Washing Machine Report Part 1)

The organic cotton industry is vital in supporting social and economic development in cotton-growing regions, and fraudulent activities jeopardise these efforts. When survival can only be guaranteed through fraudulent practices because farmers and harvesters of cotton are struggling to make ends meet, it becomes clear that the industry’s foundation is at risk.

Fostering Trust and Accountability

To combat fraud effectively, industry stakeholders must unite and prioritise concerted efforts. Yet one significant stakeholder, the global farming community, holds little to no power or agency in the current framework.

Is Alternative Sourcing the Solution? 

A farm-to-product approach, practised by companies like Raddis Cotton or direct purchasing practices via the Regenerative Organic Certified (ROC) and Fairtrade Indian cooperative Chetna, could provide orientation. 

Raddis System, conceived by Grameena Vikas Kendram Society for Rural Development (GVK Society), an Indo-Dutch hybrid organisation, offers an innovative farm subscription model. They advocate for direct connections between brands and farmers, eliminating intermediaries to ensure transparency and traceability. Brands do not just buy a certain amount of cotton over a more extended period but instead pay an ​‘acre contribution’ calculated on the number of acres needed to grow the cotton. These acres previously farmed conventionally are restored by growing regenerative cotton as part of the collaboration, ideally no less than three years. 

Raddis emphasises that the ​‘acre contributions’ are pivotal in the transformative system. These contributions are considered donations to the NGO, enabling a growing team of 165 individuals on location to assist farmers in implementing the program. The organisation supports 18,000 smallholders and their communities in southeast India. Among these, more than 3,000 farmers grow organic and regenerative cotton as part of Raddis Cotton. 

The funds play a crucial role as they provide the necessary capital for GVK Society to procure and distribute non-GMO seeds, including symbiotic and food crops, fostering a diverse multi-crop garden comprising legumes, marigold, pulses, castor, beans, okra, and tree saplings.

Moreover, this initiative goes beyond just providing seeds; it encompasses comprehensive support for farmers. They receive training, guidance, and assistance throughout the year, enabling them to obtain certifications and ensuring continuous aid for their families and the rural communities involved. This holistic approach empowers farmers to adopt sustainable agricultural practices, cultivates self-reliance, and enhances the well-being of individuals and the wider community. In addition, in-transition cotton is repositioned as a valuable harvest within the cotton market.

Community Empowerment

To usher in a new era of transparency and certification trust, prioritising agency and empowerment amongst farming communities is essential. In all ongoing talks about sustainable fibre production, millions of farmers across the globe comprising the industry’s foundation have been sidelined.

The transformative power of organic cotton can only unfold within a new systemic structure.

Involving farmers in decision-making processes through a bottom-up approach and fostering knowledge sharing, organic practices support local communities and contribute to cotton-growing regions’ economic and social well-being. This emphasis on community involvement could serve as a protective measure against fraudulent practices, as local farmers would have a vested interest in upholding the integrity of their practices.

To date, a lacking agency amongst farmers, the industry’s ongoing race to the bottom, and mass-scale investments in the businesses and institutions dominating the discourse have resulted in little incentive. ​“To the extent that the apparel sector invests in farmed fibres at all, it invests in cotton – specifically, in the Better Cotton Initiative and in organic cotton through such media as The Organic Cotton Accelerator, Textile Exchange, and CottonConnect.” (Source: The Great Green Washing Machine Report Part 1)

With global demand for organic cotton growing continuously, it appears that cotton’s organic industry needs to accept a redistribution of power and successfully integrate fibre farmers.

Giri, the founder of B‑Corp Certified cotton product company Gallant International, emphasises that the key to preserving organic integrity is building direct relationships with farmers and supporting their efforts. An excessive focus on expensive certifications and top-down investments has resulted in an underdeveloped supply chain foundation. This prompts us to consider whether this centralised and certification-centric model lies at the root of the industry’s challenges.

Ensuring Crop Purity

Countless farmers, particularly in markets like India, grapple with the challenge of GMO seed contamination, predominantly due to the dominance of GMO conglomerates like Monsanto. The purity issue becomes exceedingly difficult to resolve as organic farmers fight an uphill battle against the prevalence of genetically modified cotton. In India, GMO cotton holds a staggering 95% share of the country’s overall cotton production, further exacerbating the struggle for organic cultivation.

Industry Initiatives

In its latest endeavour, GOTS, in partnership with the European Space Agency (ESA) and AI company Marple, has initiated a project to tackle the widespread contamination issue. Their objective is to showcase the vast potential of remote satellite monitoring in tracking organic cotton cultivation systems. This pioneering initiative involves training artificial intelligence (AI) using ESA satellite data to accurately identify cotton fields across India and automatically classify them based on their cultivation standards. By harnessing the power of cutting-edge technology, this project aims to revolutionise the monitoring and verification processes in the organic cotton industry. (Source: Apparel Insider)

In response to India’s ongoing organic cotton crisis coupled with increasing global demand, the German Partnership for Sustainable Textiles recently saw industry giants, including C&A, H&M, and Tchibo, unite to fund GMO-free seed supply and support farmers converting to organic farming, co-coordinated by the Organic Cotton Accelerator (OCA). Without industry-funded backing, ambitious targets will be impossible to meet. Will such partnerships, steered by powerful conglomerates, manage to provide tangible benefits to all supply chain actors, and will these be transparently disclosed in waterproof, third-party audits?

SourceTrace, an agri-value-chain management software, is partnering with Chetna, the Fairtrade-certified farm mentioned earlier, to combat fraud and make organic cotton farming transparent and equitable. They achieve this by offering complete traceability of goods using distinct farmer group IDs. The software captures bank account payments, a step towards digitalising the paper-based system. 

However, most Indian farmers do not have a personal bank account, therefore the group structure. The digital solution company is making progress in providing transparency. 

“Deploying SourceTrace solutions has enabled gin-level traceability from spinner receiving point all the way down to farmers.”

An illustrative case, Chetna’s successful collaboration with SourceTrace has allowed them to command a higher price for their cotton, enabling them to pay a premium to smallholder farmers. This approach empowers farmers economically and promotes sustainable cotton cultivation. ​“The sale price, in turn, enabled Chetna to pay a premium to its farmers, which is 5.8 Indian Rupees more per kilo of organic cotton procured.” (Source: YourStory​.com) Ideally, these solutions would be open source, funded by governments and the industry’s most profitable businesses.

The implementation of stringent standards for certification, supply chain transparency, and labelling requirements remain a persistent challenge for global certification programs. Collaborative initiatives involving all levels, including governments, non-governmental organisations (NGOs) like the Organic Cotton Accelerator, farmer cooperatives such as Fairtrade Chetna Organics, and industry players, are vital to address this issue. Most importantly, power distribution must be equalised. These collaborative efforts are crucial in establishing robust regulations and ensuring compliance across the entire organic cotton supply chain.

Consumer Awareness

Furthermore, consumer education initiatives like COSH!‘s comprehensive research articles are vital in increasing awareness regarding the significance of endorsing transparent and ethical practices within the organic cotton industry. COSH! closely follows developments in all intersecting areas of sustainable fashion, adjusting its algorithm continually to help consumers make informed choices, actively supporting authentic organic cotton producers. This fosters a sense of responsibility and enables consumers to contribute to the growth of a sustainable and trustworthy organic cotton market.

The organic cotton industry embodies the ideals of sustainability and ethical production, allowing consumers to make conscious choices. 

Nevertheless, the alarming gap between the quantity of organic cotton sold and actual production figures poses a grave threat to the industry’s integrity and has eroded industry and consumer trust. Vested interests strain the current structures, resulting in an inflexible and untrustworthy system. 

Unfortunately, this situation disproportionately affects small brands and producers, leaving them trapped in a challenging environment that undermines their efforts towards sustainability. Urgent action is needed to address these issues and foster a more transparent and trustworthy organic cotton industry.